Without a further monetary policy tightening by the Bank of Ghana, the rising inflation will not subside.

According to research firm, IC Research, the Monetary Policy Committee baseline forecasts show a slightly higher elevated profile in the year ahead.

It said the upside risks could become embedded in underlying inflationary pressures, if not contained with further policy tweaks.

“Overall, the outlook supports a near-term return to the path of disinflation with anticipated food harvest in mid-3Q2023 and a favourable base effect in 4Q2023. However, upside risks abound”.

The recent inflation expectation survey by the Bank of Ghana indicated that business expectations of inflation remain flat at an elevated level.

IC Research believes the unchanged inflation expectations reflect the favourable impact of the 4-consecutive months of decline which was offset by the supply-side and tax-induced inflation upticks in the past 2-months.

“We believe the unchanged inflation expectations reflect the favourable impact of the 4-consecutive months of decline which was offset by the supply-side and tax-induced inflation upticks in the past 2-months”.

It added that the renewed spike in crude oil prices on the global market, with Brent crude reaching 85 dollars, could revive non-food inflation with higher utility tariffs under the baseline.

Essentially, the inflation monster has only been dazed by ongoing fiscal and monetary tightening but will not be finished off without further policy tightening.